Editor’s Letter

Fleet Street’s Arab Spring

In an irony not lost on the gods, Rupert Murdoch’s endless summer of hacking began not with News of the World but with another profitable outpost of his vast media empire. It was on the morning of July 4 that the Fox News Twitter account was hacked into by a group calling itself “Script Kiddies.” They managed to post a number of tweets claiming that President Obama had been killed before the hacking was discovered and the posts removed. Outraged over the intrusion, Fox News overlords were quick to demand an account of the invasion. “We will be requesting a detailed investigation from Twitter about how this occurred, and measures to prevent future unauthorized access into FoxNews.com accounts,” the company’s digital general manager announced importantly.

My, how that worm turned in a hurry. The very same morning, on the other side of the Atlantic, The Guardian began publishing damaging reports on the Murdoch organization’s own hacking activities. Britain’s other papers dove in, too, and over a period of just a few days, the collective dispatches set in train a series of actions, reactions, denials, resignations, and arrests that have brought this vast media empire and the man who built it to their knees. This is not the end one would have expected—or perhaps it is—for a man who is arguably the most powerful press baron in history, a flinty, visionary buccaneer whose might and influence span every time zone on earth, as former Telegraph editor Charles Moore noted recently. A scrappy, fiery competitor, Murdoch has spent a lifetime in battle—against the British and American establishments and against innumerable business rivals. His twin tactics of intimidation and support have given him back-and front-door access to decades’ worth of fawning presidents, prime ministers, and other shamans of the world’s stage. In the end, however, the whole elbows-out apparatus was laid low not by the economy or the authorities or an obvious foe, but by a pretty teenage girl who was kidnapped and murdered almost a decade ago.

Milly Dowler, 13, was heading home from classes wearing her school blazer and gray skirt and carrying a backpack full of books when she vanished in 2002. A nationwide hunt was launched, and at first there were encouraging signs. Messages that her parents had left on her voice mail were erased, giving her family, and the police, encouragement that she was still alive. Alas, these were false hopes. Milly hadn’t deleted the messages. That was allegedly the handiwork of an investigator hired by News of the World, hoping to get a leg up on the competition: her voicemail box was full and so the investigator, who had hacked her phone account, erased messages to make room for more calls.

For members of the public, it was one thing when *News of the World’*s phone-hacked scoops were about footballers, TV and film stars, members of the royal family, and assorted tabloid found objects. All that changed when The Guardian revealed that the Murdoch paper may have hacked into the voice-mail messages of the families of soldiers killed in Afghanistan and Iraq and of those who had lost loved ones in the terrorist attacks in London in mid-2005. Those revelations were damaging enough to Murdoch. But it was the July 4th report of *News of the World’*s involvement in the Milly Dowler case that set News International’s decline on hyperspeed.

The phone-hacking scandal involving reporters and editors at News of the World—once the largest-circulation newspaper in the English-speaking world, with almost three million copies sold every Sunday—had been a slow drip over the past six years. Intimate, detailed, and impossible-to-get stories in the paper were, it came to be known, not the result of legitimate reporting but the fruits of illegal hacking into telephone voice-mail messages. As any editor will tell you, startling newsroom revelations are generally met with queries about where the information came from and how the reporter got it. Seriously startling revelations are followed by the vetting of libel lawyers. By the time the information finally gets into print, a long line of people know exactly how it was obtained. Scotland Yard’s official investigations of the scandal were cursory and unthreatening. Successive prime ministers, cowed by the influence of Murdoch’s papers, avoided any kind of outright confrontation.

The moment The Guardian—which, against overwhelming opposition, not to mention public ennui, had been exposing *News of the World’*s phone hacking off and on for two years—broke its story on the Dowler case, the Murdoch empire was in trouble. Murdoch’s son James, who is in charge of News International, sought to cauterize the spreading public outrage by shutting down the 168-year-old tabloid—the first British paper his father had purchased, more than 40 years ago. So engulfed was the English press in the Murdoch scandal that news of the fate of last year’s media sensation, WikiLeaks founder Julian Assange, whose extradition appeal hearing over sex charges was going on at the same time, was relegated to small items deep inside the papers.

Within days, further revelations tumbled out, including reports that the practice of phone hacking may have been much more systemic in Murdoch’s English papers than had previously been believed. Published reports (denied by News International) claimed that The Sun and even the vaunted Sunday Times might also have engaged in the practice, specifically with regard to a 2006 Sun story revealing that the four-month-old son of then chancellor and later prime minister Gordon Brown and his wife, Sarah, was suffering from cystic fibrosis. The Guardian eventually retracted the claim that the Brown story was reported illegally, but Brown’s eloquent if slightly crazed speech in the House of Commons was testament to the hurt and torment that this sort of press invasion can cause. “Many, many wholly innocent men, women, and children who at their darkest hour, at the most vulnerable moment of their lives, with no one and nowhere to turn, found their properly private lives, their private losses, their private sorrows, treated as the public property of News International,” he thundered. “Their private and innermost feelings and their private tears bought and sold by News International for commercial gain.”

News of the World didn’t get where it was doing things by half-measures. The paper’s hacking culture was sustained and voracious, and the damage is only now being fully tabulated. It is estimated that as many as 4,000 people had their voice-mail accounts hacked into; of those, fewer than 200 have so far been informed by London’s Metropolitan Police, also known as Scotland Yard, an organization whose reputation has been damaged almost as much as News International’s. There are myriad charges that the Murdoch paper paid off police officials, a systematic program of corruption that went a long way toward discouraging any kind of serious investigation of News of the World. In 2009, after the hacking story first broke, some 11,000 pages of evidence were delivered to John Yates, the assistant commissioner of the Metropolitan Police and the man charged with deciding whether to proceed with a full inquiry. After considering the matter for a single day, he decided not to launch an investigation. With politicians seemingly at the beck and call of the Murdoch organization, it appears that the Metropolitan Police just fell into line as well. Resignations, including those of Yates and Police Commissioner Sir Paul Stephenson, have done little to shore up Scotland Yard’s image.

In a rare act of unanimity, the House of Commons was set to vote on July 13 that News International was “unfit” to purchase BSkyB, the huge satellite broadcaster that Murdoch has a share in and was trying to buy outright, when at the last minute, he called off the $12 billion deal. The drop in the stock price of News Corporation, the parent company, in the two weeks after the scandal broke wiped more than $8 billion from the firm’s books. Andy Coulson and Rebekah Brooks, both former News of the World editors and both perilously close to Prime Minister David Cameron, were arrested and questioned. The Press Complaints Commission, a fairly toothless, self-regulating body, says that it looked into the matter of *News of the World’*s activities when the paper’s hacking was first raised. However, the then chairman of the Editors’ Code of Practice Committee, which writes the code that the P.C.C.’s enforces, was none other than Murdoch loyalist and News International head Les Hinton, later to be put in charge of The Wall Street Journal. As reported in The Guardian, Hinton “persuaded the P.C.C. not to impose further sanctions.” He’s gone now, too.

Perhaps no outside player in this unfolding melodrama has as much to lose as Cameron. When Coulson, who ran News of the World from 2003 to 2007, was forced to resign over the initial arrests in the scandal, Cameron, then the Tory leader, brought him on board as his P.R. man. When Cameron got to Downing Street, he made Coulson his director of communications, despite numerous private warnings from colleagues that the move was unwise and even reckless. Hiring Coulson counterbalanced the prime minister’s background and image as a toff and gave him a direct line to the powerful Murdoch organization, its influence, and its information bank. Cameron’s public reasoning for hiring Coulson, namely that everyone deserves a “second chance,” was a bit lame. That’s the sort of rationale you might present for giving a waiter his job back—not for ushering a disgraced former tabloid editor through the doors of the prime minister’s residence. And if there was a Rebekah Brooks-Andy Coulson-David Cameron daisy chain passing along hacked News of the World tidbits about Cameron’s opponents during the 2010 campaign (the Murdoch papers came out in support of the Tory leader), as has been rumored, it could prove disastrous to the government.

It is the sheer smallness of Britain, and the habitats of its chattering classes, that has enabled this culture of closeness to exist and thrive. A number of the major figures are members of what the papers call the Chipping Norton set, named after the small Cotswold town, northwest of Oxford, where much aggressive socializing took place on weekends and holidays between members of the government, members of the extended Murdoch clan, and other influential media figures. David and Samantha Cameron have had a house nearby for a decade. So do Andy Coulson, Rebekah Brooks, Elisabeth Murdoch and her husband, Matthew Freud, and Alan Rusbridger, the editor of The Guardian.

As the firings, arrests, and resignations pile up, Murdoch has become increasingly isolated. It can’t be easy being 80 and seeing the company you gave your life to reeling as it now is. He’s lost his two closest deputies in Hinton and Brooks—both of whom resigned on the same day. All he has at this point are his formidable wife, Wendi, and his children, and that curious family dynamic is playing out largely behind closed doors. It is Shakespearean in detail and scope, with the parts of Goneril and Regan being taken by Elisabeth and James, and Lachlan in the role of Cordelia. A few weeks after Rupert gave his annual summer garden party, Elisabeth’s husband, Matthew, gave one for his family, the Freuds, at the couple’s 22-bedroom spread in the Cotswolds—a dynastic challenge of sorts. Aloof, cerebral, and with the prim swagger of a bully who turns up at a fight with a seven-foot chum standing at his side, James has come under withering criticism for his handling of the scandal but received mixed reviews for his testimony before a parliamentary committee. It was only two years ago that he railed publicly against the BBC, saying that “the corporation is incapable of distinguishing between what is good for it, and what is good for the country… . The scope of its activities and ambitions is chilling.”

Investigations in America by the F.B.I. and the Justice Department into charges that Murdoch’s papers might have tried to hack into the voice-mail systems of 9/11 victims could prove damaging not only to the company’s image but also to its standing on Wall Street. The News Corporation’s board of Yes Men directors would be forced to take a stand. And shareholders might begin demanding more of a say. It certainly hasn’t been a good year for the company. The $580 million that Murdoch paid for MySpace in 2005 was redeemed in June for a mere $35 million. (This after his $5 billion investment in 2007 in The Wall Street Journal had its value written down by half within two years.) If the 9/11 charges have any weight, Fox News’s influence with the conservative base will be grievously undercut. And it’s fair to say that James’s future as a mogul of any standing is at considerable risk. It may just be that the whole mess will mark the beginning of the end of the Murdoch era of journalism. Which would be a good and bad thing. His type of red-top reporting has debased journalism on both sides of the Atlantic. But at the same time, he is one of the last press barons who actually loves newspapers. Whoever replaces him, it’s unlikely to be someone who sees the romance in owning papers like The Sunday Times or The Wall Street Journal.

The News of the World affair may be the most public hacking scandal of the year, but it’s dwarfed by the continuous assault on the computer systems of American corporations. These attacks are intended not to disrupt systems but to pry security secrets and intellectual property from one set of hands and place them in another. The cyber-assaults have penetrated the defenses of Internet giants such as Google and Intel, defense contractors such as Lockheed Martin and Northrop Grumman, energy companies such as ExxonMobil and BP, and Wall Street powerhouses such as Morgan Stanley. Who or what is behind the attacks? Very few people in corporate (or political) America want to come right out and say it on the record—the potential implications for business and foreign policy are too great—but the answer in many cases is: China. The attacks have become so frequent, and so consequential, as to verge on acts of war. This is the terrain that Vanity Fair contributing editor Michael Joseph Gross explores in his riveting report in this issue, “Enter the Cyber-dragon,” on page 220. Gross’s most recent article in the magazine, on the computer worm Stuxnet, brought him deep into the world of Black Hat cyber-operatives, foreign intelligence agents, and corporate cyber-security experts, a curious new subculture that is fashioning the world we’re all about to live in, and in fact are already living in, to a degree. Now a similar caliber of shadowy specialist has opened up to him about cyber-attacks launched from foreign soil, including China, providing exclusive access to episodes that news accounts have as yet dimly grasped. These hackers are ingenious at covering their tracks. Michael gives one recent example of an attack on a major American company. The hackers knew that their assault might cause disruptions that would prompt users at the company to consult the help desk—so they arranged to take over the help desk too, thereby avoiding detection.

Corporations are keeping mum about all this—many of them have business interests in China, which they don’t want to jeopardize. The U.S. government, only slightly more forthcoming, has a different economic worry: much of America’s massive debt is held by China. But cyber-professionals understand what the stakes are here: this battle, though invisible, is nothing less than a fight for the ownership of a globalized world. In this budding cyber-war, the U.S. should be mindful of the fate of another onetime superpower. Robert Hughes, in Rome, his marvelous forthcoming history of the city, recounts Polybius’s tale of how the Romans approached a sea engagement with the mighty Carthaginian Navy, then the envy of the world. The Roman Army was unstoppable but Carthage could only be fully taken if its forces were engaged at sea. And, as Hughes says, the Romans “had neither a fleet nor any naval tradition.” They got lucky when one of Carthage’s oar-powered warships ran aground on the way to Messana. The Romans took it, and copied it. And copied it, and copied it. With their new fleet, the Romans defeated the Carthaginian Navy at sea with ships designed by their opponent. If the gods know anything, they know that history repeats itself.

correction: This article has been changed to reflect two errors in the print version. We stated that the Press Complaints Commission had never really looked into the News of the Worldhacking scandal. We mistakenly referred to Les Hinton as the P.C.C.’s head.

Graydon Carter is the editor of Vanity Fair. His books include What We’ve Lost (Farrar, Straus and Giroux) and Oscar Night: 75 Years of Hollywood Parties (Knopf).